Metallurgy has always been more of a black art based on trial an error rather than a science - even now days that steel production is carefully and reliably controlled with very small imperfections per average volume, these still do exist and actually account for material failures that have been known to be catastrophic (a whole platform in the North Sea failed due to one such imperfection 20 years ago or so).
Imperfactions center around slip planes that basically are due to irregularities in the way the Iron/Carbon atoms are arranged in space that might prove fatal under relatively low stresses since they open up the material in a zip like fashion. Swords need to be well above that failure mode - that is need to be much more reliable than structural steel, due to their smaller sections and thus much higher developed stresses in them.
Metallographic examination of katanas has confirmed that they are in fact the finest hand to hand weapons ever poduced in the history of mankind having more than a million alternating layers of iron and carbon in their microstructure (indicating nigh to perfect alloying) as opposed to a few tens of thousands found in the second best (Spanish medieval swords produced in Toledo).
In a more grim note, the "testing" process, involved cutting real fresh or alive flesh. There was an endless array of opportunities for the bushi to do so. In addition, endless tempering repetitive, precise hits were conducted in swords made by the master swordsmiths. Precision, repetitiveness and patience, those most of Japanese of virtues were responsible for the end result.
Social mobility was rare in medieval Japan and the dedication of the master/pupil relatioship as well as continuous civil wars guaranteed an evolutionary process in swordmaking that lasted for more than half a millenia -in Europe by contrast the continuous evolution of weapons and fighting methods as a result for the need to adapt to the opponents disturbed the continuity of such processes.
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